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Measuring income mobility with dirty data

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  • Cowell, Frank
  • Schluter, Christian

Abstract

We examine the performance of measures of mobility when allowance is made for the possibility of data contamination. We find that “singlestage” indices – those that are applied directly to a sample from a multivariate income distribution – usually prove to be non-robust in the face of contamination. However, “two-stage” models of mobility – where the distribution is first “discretised” into income intervals and then a transition matrix or other tool is applied – may be robust if the first stage if appropriately specified.

Suggested Citation

  • Cowell, Frank & Schluter, Christian, 1998. "Measuring income mobility with dirty data," LSE Research Online Documents on Economics 2079, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:2079
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    File URL: http://eprints.lse.ac.uk/2079/
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    References listed on IDEAS

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    1. Maasoumi, Esfandiar & Zandvakili, Sourushe, 1990. "Generalized entropy measures of mobility for different sexes and income levels," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 121-133.
    2. Frank A. Cowell, 1985. "Measures of Distributional Change: An Axiomatic Approach," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 135-151.
    3. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
    4. Fields, Gary S. & Ok, Efe A., 1997. "A Subgroup Decomposable Measure of Relative Income Mobility," Working Papers 97-04, C.V. Starr Center for Applied Economics, New York University.
    5. Maasoumi, Esfandiar & Zandvakili, Sourushe, 1986. "A class of generalized measures of mobility with applications," Economics Letters, Elsevier, vol. 22(1), pages 97-102.
    6. Geweke, John & Marshall, Robert C & Zarkin, Gary A, 1986. "Mobility Indices in Continuous Time Markov Chains," Econometrica, Econometric Society, vol. 54(6), pages 1407-1423, November.
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    Citations

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    Cited by:

    1. Thomas Raferzeder & Rudolf Winter-Ebmer, 2007. "Who is on the rise in Austria: Wage mobility and mobility risk," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 39-51, April.
    2. Philippe Van Kerm, 2004. "What Lies Behind Income Mobility? Reranking and Distributional Change in Belgium, Western Germany and the USA," Economica, London School of Economics and Political Science, pages 223-239.
    3. Philippe Kerm, 2002. "Inference on inequality measures: A Monte Carlo experiment," Journal of Economics, Springer, vol. 77(1), pages 283-306, December.
    4. Van Kerm, Philippe, 2002. "On the magnitude of income mobility in Germany," IRISS Working Paper Series 2002-03, IRISS at CEPS/INSTEAD.
    5. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, pages 897-931.
    6. Checchi, Daniele & Ichino, Andrea & Rustichini, Aldo, 1999. "More equal but less mobile?: Education financing and intergenerational mobility in Italy and in the US," Journal of Public Economics, Elsevier, vol. 74(3), pages 351-393, December.
    7. Van Kerm, Philippe & Pi Alperin, Maria Noel, 2013. "Inequality, growth and mobility: The intertemporal distribution of income in European countries 2003–2007," Economic Modelling, Elsevier, vol. 35(C), pages 931-939.
    8. repec:dau:papers:123456789/4994 is not listed on IDEAS
    9. Longford, N.T. & Pittau, M.G., 2006. "Stability of household income in European countries in the 1990s," Computational Statistics & Data Analysis, Elsevier, pages 1364-1383.

    More about this item

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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